Stocks opened lower on Monday as new worries around a U.S.-China trade agreement emerge despite Friday’s announcements.
The Dow Jones Industrial Average fell 52 points at the open, or 0.2%. The S&P 500 slid 0.1% along with the Nasdaq Composite.
Monday’s decline came after a surge for stocks in the previous session. The S&P 500 and Nasdaq both gained more than 1%. The Dow, meanwhile, rallied more than 300 points, or 1.2%.
CNBC learned through a source that China wants to have additional trade talks before signing what President Donald Trump characterized Friday as a “very substantial phase one deal.” It is not clear if the additional talks will take place in Beijing or Washington, however. Bloomberg News first reported the news.
As part of phase one, China would buy between $40 billion and $50 billion in U.S. agricultural products. China also agreed to address intellectual-property concerns raised by the U.S. In return, the U.S. agreed to hold off on a tariff hike scheduled for this week.
Trump said the phase one deal was a success, but China’s characterization of the outcome was far more muted. Chinese state media said both sides made “substantial progress” but did not use the world “deal” when describing the outcome.
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“Investors are having second thoughts about the trade deal,” said Peter Cardillo, chief market economist at Spartan Capital Securities. “Even though there was a breakthrough in the talks, nothing was signed.”
Treasury Secretary Steven Mnuchin told CNBC’s “Squawk Box” on Monday that while both sides made “substantial progress” last week, the agreement is still “subject to documentation.” He also said a December tariff hike on Chinese products would go through if a deal is not reached by then.
The world’s two largest economies have imposed tariffs on billions of dollars’ worth of one another’s goods since the start of 2018, battering financial markets and souring business and consumer sentiment.
Investors also braced for the start of the earnings season, with a slew of major banks set to report Tuesday. Citigroup, Goldman Sachs, J.P. Morgan Chase and Wells Fargo are all scheduled to release their results from the previous quarter.
Analysts expected third-quarter earnings for the S&P 500 to have fallen 4.6% on a year-over-year basis, according to FactSet
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